Our recent beef price increase is due to world commodity prices. Many people would like to think that farms like ours are immune to industrial price fluctuations, but just like no one individual is an island, neither is any farm an island.

In 2013, the world inventory of beef cattle dipped below the number in 1950. Think about the world in 1950. China. India. Africa. At half the population and half the wealth, that was a different world. The beef cattle inventory has returned to that level, creatingan unprecedented shortage.

Right now, today, we would make more money selling our finished beeves to the industrial food system than direct marketing to our customer families. Think of that. The price spike in the 2 last years has moved the value of a 1,000 pound steer from $900 to $2,000. Supermarket prices are creeping up, but the ones that are taking it on the chin are the feedlots and processors–those notorious middle men. For the last 2 years, many feedlots have been losing $200 per head, but each is hoping the nextguy will go out of business first. The deepest pockets will win. Shallow pockets will go out of business as the industry consolidates due to financial pressure.

We work closely with neighbors and buy cattle from them. These farmers and their families have no desire to take less for their calves than the market will bear. They’ve been waiting a long time to be in the driver’s seat like this. The result is that what we paid around $1200 for a year ago costs us $1600 and more now. That’s a minimum of $400 per beef more.

If an average carcass yields 350 to 400 pounds of usable product, that’s an average of $1 or more per pound increase just to stay even. But even that is not really even because the value has also risen on the pounds after calf weight–those other 500 pounds we’ll put on in the pasture. To really stay even, we need yet another $1 per pound increase. Why should we get less for our grass finished beef than the industry gets for hormone-drug-grain feedlot beef?

Why is the world inventory so low? I think three things have caused this perfect storm. First, some huge droughts have literally depopulated areas in the Dakotas and the southwest. Australia is in significant decline after a series of historic droughts. Many cows, the breeders (mamas) went into ground beef because farmers had no grass for them.

Second, the aging farmer is slowing down. With the average age of cattle owners now approaching 70 (average for all farmers is nearly 60) these farmers and ranchers aren’t willing to expand at any price. Rather than responding to price increases like normal, the tepid response indicates life cycle fatigue. Millions of acres of farm and ranch land have simply been abandoned in the last 15 years due to the aging out of livestock operators.

Third, huge areas of the world previously devoted to grass have been converted to crops for both people food and fuel production (biodiesel and alcohol). Argentina, bastion of pampas and grass production, is converting millions of acres to GMO corn and soybeans. Ditto for Uruguay and Paraguay, both historically significant contributors to the world’s beef supply.

This spring saw the first significant response to the high prices: farmers began retaining heifers to become mama cows and produce more calves. But that created the current firestorm because all of those heifers that would have gone to abattoirs and entered the beef trade have been kept alive. They’re all out walking around rather than being in tray packs at the supermarket. It appears that this extreme world wide shortage will last for at least three years. That’s how long it takes for a heifer tobreed, birth a calf, and for that calf to grow up to processing weight. It’s a long cycle.

We are responding like many other farmers–retaining heifers and working towards expanding our cow herd. That means we won’t have to buy as many calves, but it also means we won’t have as many to sell in the short term because our grass, rather than fattening finishing animals, will be carrying mama cows. We’re looking at our own shortage that is simply a microcosm of the bigger world issue. Just 20 years ago I remember buying 500 pound calves for $300. Today, those calves are bringing $1,200.

Thursday, September 24 & Friday, September 25, 2015

Thursday, Sept. 24, 9-5

Space is Limited!

Sequatchie Cove Farm

Want to hone your skills to profitably produce high quality food and a quality lifestyle?

This workshop will assist you in honing the skills needed to produce high quality food and a quality lifestyle - profitably. Financial profitability and the improvement of the farm’s natural resources (soil, water, plants, wild-life, and culture) are the two essential factors of any agricultural enterprise. Producing high quality food takes whole farm management thinking; assessment of land capability, fertility, water, fencing, management, labor, types of animals, seasonality, what product to sell, where and to whom: In this workshop several leading experts will help bring this whole picture together. There is plenty of time set aside forquestions and answers for your farm in particular.

Seminar Sessions:

Allen William will speak on the state of the grass-fed beef business, what opportunities are at hand, and how to develop a business that best takes advantage of these opportunities. He'll discuss how to truly finish animals, how to assess which type of animal best fits your goals and enterprise, and how to develop holistic profitability.

Carolyn Hoagland will bring to us the latest in soil biological research, how bacteria communicate, and ideas on ‘waking’ them up. These will be interactive sessions so bring your best and worst dirt with you, as she will give you hands on ways to assess the texture and structure of our own soil. We will perform a slake test and texture analysis of soil samples brought from your own fields. Each lecture is designed to lead participants through an interpretation of the slake and texture exercises along with Q&A sessions about different management techniques to improve soil performance and fertilizer efficiency.

Greg Brann will deepen our thinking on how to manage our grass to bring about healthier soils and more profitable farms.

There will also be a brief fencing demonstration and a panel discussion on direct marketing meat in the South East.

About the Presenters:

Allen William holds a Ph.D. in Animal Breeding and Genetics/Reproduction from Louisiana State University and an M.S. and B.S. in Animal Science from Clemson University. He is a founding partner and President of Livestock Management Consultants, LLC, a livestock industry consulting firm specializing in building natural branded food programs, facilitation of Values Based Value Chain management, and Ranch/Farm business planning. He also serves as Chairman of the Board of Directors for the Association of Family Farms (AFF).

Carolyn Hoagland is the Farm Manager at Sewanee, The University of the South. She holds a masters degree in Soil and Crop Science from Colorado State University and a Permaculture Design Certificate from Oregon State University. She has taught soil microbiology courses at the University of Wyoming and a Colorado State University. Hoagland's research focus is soil microbial ecology and how plant-microbe interactions contribute to the development of soil organic matter and soil fertility.

Greg Brann is a USDA/NRCS State of TN Grazing Specialist (Soil/Grass Connection). He has been a key player in assisting in the development grazing and grass management of literally hundreds of farms around the state.

Kelsey Keener represents Sequatchie Fence Company (Do's and Don’t of High Tensile Electric Fencing and Demonstration) and will demonstrate a few basics in fence building.

Panel Discussion – Lessons learned and opportunities available marketing Beef and other meat in the South East.

For directions to Sequatchie Cove Farm, click here. For attendees traveling out of town who may need overnight accomodations, or if you have other questions please contact Bill Keener of Sequatchie Cove Farm at bill.keener@sequatchiecovefarm.com or 423-942-9201.

Using New Zealand genetics we AI'd all the cows in the dairy herd we could catch cycling this spring. Now we have 2 bulls in the herd to clean up or breed those we missed. They are stout South Poll beef bulls born and raised on Sand Mountain at Bent Tree Farms, outside of Fort Payne, AL. One is a hefty one ton 5 year old, the other a frisky 1 year old.In the end he reigns supreme as the unchallenged leader of the herd. When a bull is put in the herd a new type of organizing power pervades the social fabric of the herd. The herd of cows keeps him gentle and focused. This is important for us since he is a ton weight and can become wild. He has learned to lag behind and not go into the milking barn as it is too crowded for him. The cows themselves become a new form of unity. The bull and his bull nature seems to round out the herd. As if without the bull the group of cows was not really the full herd they could be in this ecology. The herd is where it lives. So, the bull like all the animals in nature does not live solely within its skin, they also live out in their surroundings- their Habitate. The cows, the bulls form unity with its surroundings, the soil, the grass, the herd, the farm, the farmer out in the farm become the unity.